Tax revenue growth good, divestment programme on track

Davos: The government will go ahead with its disinvestment programme and “a lot of activity” is expected on that front, Finance Minister Arun Jaitley said today, while hinting at complete privatisation of some loss-making PSUs at a later stage.

He also said that the government’s tax revenue collections have been good, although refunds for past periods are making an impact.

On whether the government would look at privatisation as well, Jaitley said it can be done in case of companies that need to be privatised and the government cannot keep funding their losses with the taxpayers’ money.

“As far as divestment is concerned, we are committed to our divestment programme and a lot of activity is expected,” Jaitley said here on the sidelines of the WEF summit.

“I wont talk about the companies, as media speculations is hurting the programme as it also leads to market speculations. The media’s role in divestment programme has been highly speculative and these speculations lead to market speculations.

“It has already happened and we have evidence to substantiate it. Therefore as far as individual companies are concerned, I am absolutely in no position to share anything with the media. but we are fairly committed to the divestment programme and we will go ahead with it in the current fiscal as also in the next fiscal,” Jaitley said.

On privatisation, he said, “Those would be the companies that are not doing well and therefore today the government can not keep taxing people in order to fund losses year after year.

“There are a large number of companies and I think at an appropriate stage, when the concerned ministries speak to us on how those companies can be revived, certainly this is one possible roadmap.”

Asked about the possible names, the Minister said, “I cannot get into speculations, because no names have been worked out.”

On whether the tax collection has been poor, the minister said, “I won’t say we have poor tax collections.

“If you look at income tax or direct tax growth, that has been significant even though we are not passing through a fast-growth economic phase. Despite a growth rate of 5.5 per cent, the direct taxes have substantially increased.

“It is the refunds that have created a problem for us as I also have to pay for the past liabilities. Similarly, in indirect taxes, some areas have done quite well. Manufacturing has been a challenging area, but we see an upward move at least in the later part of the year.”